Yahoo Boosts Share Buyback by $5 Billion

“Yahoo, like a lot of companies, is a company that needs to reinvent itself,” said Marissa Mayer, chief executive officer of Yahoo! Inc.. “You shouldn’t design for the expert user.” Photographer: David Paul Morris/Bloomberg

Yahoo will also sell $1 billion in convertible debt
maturing in 2018, in a private placement, the Sunnyvale,
California-based company said yesterday in a statement.

Mayer’s turnaround has focused on acquisitions of smaller
technology companies that can add to the company’s talent pool
or reach new sets of users. The buyback authorization is the
latest since Yahoo agreed in July to repurchase 40 million of
its shares from Third Point LLC, run by activist investor Daniel
Loeb. Yahoo sold half its stake in Alibaba Group Holding Ltd.
last year and said it would return most of the $3.65 billion in
proceeds to shareholders.

“This is a prudent move by management as the company works
to turn around its core and return to revenue growth,” Robert
Peck, an analyst at SunTrust Robinson Humphrey, wrote in a note
to investors. Peck has the equivalent of a hold rating on the
shares.

Yahoo rose 2.9 percent to $35.62 at the close in New York.
The stock has climbed 79 percent this year, more than triple the
increase for the Standard & Poor’s 500 Index.

The authorization increased to $5.3 billion total, Sarah
Meron, a spokeswoman for Yahoo, said in an e-mail. Yahoo has
already repurchased $5.3 billion in stock since January 2012,
including $1.7 billion in the third quarter, the company said on
its earnings conference call on Oct. 15.

Design Lead

Separately, Mayer spoke yesterday at Salesforce.com Inc.’s
Dreamforce conference in San Francisco, where she announced
plans to hire a head of design who will report directly to her
as part of the company’s push to create appealing products.

The senior vice president of design will help the company
create apps and Web pages that target the “core essence” of
what users want, she said. Mayer said she has been joining Yahoo
product managers on trips to countries including Israel, China
and Japan to study how consumers and advertisers make use of the
company’s products.

“Yahoo, like a lot of companies, is a company that needs
to reinvent itself,” Mayer said. “You shouldn’t design for the
expert user.”